Possible tax on Art and wine even if not sold, how long before coins are in that mix?
coinbuf
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From USA Today, "Should the wealthy pay taxes on expensive art and wine? Joe Biden thinks so. Here's how it would work". If something like this became reality, I have to think that coins would be put onto that list along with physical gold and silver. Should this or some version of this be enacted into law how do you think the rare coin market be impacted? Here is a link to the article for those interested in reading it.
Please this is not about politics just wondering if others would have concerns about this type of policy and the impact on collectors and the coin market.
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If it hits coins, then I would think it would hit trading cards, comic books, stupid shoes, and other collectables.
I truly hope not though.
"Should the wealthy pay taxes on expensive art and wine?"
Just the wealthy? That's the way it starts. Take a look at income taxes to see how it ends.
Its about taxing unrealized gains.
I won't comment other than to say a lot of these kinds of assets would go "underground".
Once they do that, if they do, the rest should follow. What a shame
If unrealized gains are taxed, will a collector be able to deduct unrealized losses?
End Systemic Elitism - It Takes All Of Us
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Isn’t the guy mentioned early in the article, Steve Cohen, the one who bought a share of Collectors Universe?
I’m certain it would extend to all those sectors you mention and hit the average person too (taxes rarely just impact the super wealthy).
I don't care because I don't own any coins or gold.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Will never happen - too hard to implement. Just political talking points.
I doubt it will happen. Even if they try to push it, it will end up in Supreme Court. That will take a long time.
Time to take my stuff boating, hope I don't have any accidents.
Everything of value I owned was lost in a tragic boating accident.
Be careful. If someone steals your collection they can just claim it was sea salvaged.
I know a lot of gun owners who lost everything in a tragic boat accident.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
The chance of this type of thing passing would probably be zero.
You mean like all the wealthy folks out there who will get 1099k'd next year for selling an end table on etsy for $625.00? Those assest -hiding rascals!
It's called the Rescue America Plan, and if taxing the unrealized gains in your 401k will hasten the rescue, who are we to stand in the way?
A tax on paper valuations just opens up greater opportunity for disputes to support a cottage industry that thrives on misguided tax policy. Ridiculous as ridiculous can be and fails to pass the straight face test. I would argue that such a tax is basically unconstitutional.
This seems to be a fair and reasonable response leaving political theatre out of the discussion.
Experience the World through Numismatics...it's more than you can imagine.
I said in my op this is not about politics, do not reply again if you cannot abide with my wishes.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
I am sad to report that I have not reached the $100 million threshold for this tax on unrealized gains to be applicable, so I am safe for now. If I happen to find a 1913 Liberty head nickel in my yard or a 64 Peace Dollar in the attic, I might start to get concerned.
_“There's a big problem right now where you can, as they say, hold your assets until death and then end up never having to pay tax,” said Jonathan Choi, a professor at the University of Minnesota Law School and a specialist in tax law.
To end that practice, Biden is proposing a “minimum income tax” on American households worth more than $100 million. The plan calls for the wealthiest Americans to pay a tax rate of at least 20% on their full income, including unrealized gains from assets that have increased in value since their purchase._
I'm fine with this.
--Severian the Lame
After reading this thread ... Odyssey Marine Exploration looks like a sure winner. LOL
You let me throw my beef right in! What gains? The gains govt. creates with inflation. There are very little Capital gains if it is inflation adjusted!
I have a nice half dime, Very nice trade dollar, A large Eagle dollar 1798, and an 1812 half all bought around 2009. Indexed or not, I have yet to see the price I paid for the coins.
Once a new tax is imposed (after being touted as one small thing) grows and matures into something else that does not resemble the one small thing (Like the Federal Income Tax and the Social Security Tax).
Rarely, if ever, does the tax go away.
Years ago I remember a discussion about some charge imposed by telephone companies on a customer's telephone bill and it being revealed that the charge was a pass through to the customers by the telephone companies of taxes imposed upon the phone companies by Uncle Sam for the purpose of raising money to pay for the cost to Uncle Sam of fighting the Spanish American War (which lasted from April 21, 1898 to December 10, 1898).
I wonder if that tax still exists today (it would not surprise me if it does).
I also wonder when it will be announced that, to fight global warming, humans around the world will be taxed for:
every breath they make;
every step they they take;
every word they speak;
every other thing that they do.
As I read your post I smiled and thought back to this song
https://www.azlyrics.com/lyrics/police/everybreathyoutake.html#:~:text=I'll be watching you. I'll be watching you.,so cold, and I long for your embrace.
That's how income tax started. It applies to far more people than originally proposed.
Weiss wrote:
There's a big problem right now where you can, as they say, hold your assets until death and then end up never having to pay tax,” said Jonathan Choi, a professor at the University of Minnesota Law School and a specialist in tax law.
To end that practice, Biden is proposing a “minimum income tax” on American households worth more than $100 million. The plan calls for the wealthiest Americans to pay a tax rate of at least 20% on their full income, including unrealized gains from assets that have increased in value since their purchase._
I'm fine with this.
I am not fine with this
End the b s loop holes... tax the wealthiest income at a higher tax rate of 28%- at a minimum and capital gains at 32%. I have a hard time seeing anyone taxed prematurely on speculative things such as Art... especially Art given its fickle nature... unless and until there is a realized profit through a sale. If taxes are paid on an unrealized gain, what happens when the market collapses- how does one account for this on schedule D? There are better ways to raise revenue through a tax policy that does not create more accounting issues than it resolves.
The better approach is to address corporate taxes. Simply end the b s and gravy train of fortune 500 companies that are able funnel so much $$$ in off shore accounts to avoid taxes. Large Companies need to pay their fair share- they don't and likely never will based on so many factors that to explain would either exceed the space for my post or bore people back to the stone age. They benefit the most from what is needed and required in rebuilding and expanding the American infrastructure.
Experience the World through Numismatics...it's more than you can imagine.
Where do you stand on being taxed on the unrealized gains in your 401k? Because that's where this is headed.
Your desire to talk about tax policy without hinting at politics is truly laughable.
So sorry my reply took such an emotional toll on you.
The slippery slope is an argument fomented by the powerful who are fearful of the weak.
The rich don't need your help fighting their battle. Unless you have a net worth greater than $100 million (spoiler: you don't), you need to fight your own battles.
Where do I stand on being taxed on unrealized gains in my 401(k)? If that legislation is ever proposed, I'll be happy to comment on it.
Where do you stand on people with $100 million being taxed 20% on unrealized capital gains? Because I'm fine with it.
--Severian the Lame
at least there's the comfort of knowing your tax dollars are well spent
I'm against it. If it's unrealized, it's not a gain.
edited to add... Where do you stand on refunding millions of dollars to the rich when their assets decline in value?
Honestly, taxing unrealized capital gains simply moves forward the collection of taxes. In the long run, this creates no added revenue. It simply decreases today's deficit at the expense of tomorrow's.
Once you set the precedent it's easy to move the thresholds.
Who cares about tomorrow, when we've got trouble today?
/s
There is already a mechanism for that. It's called depreciation. Why would you fight against the fair and logical application of its counterbalance unless you have a net worth greater than $100 million (spoiler: you don't).
It's important to understand that these assets are intentionally being used to shelter gain from taxation until after death, which itself allows for nuanced tax benefits when structured correctly.
Your household is worth $100 million. You hide $5 million in a painting because other assets generate taxable income. Hold it for two decades during which zero gains are reported, zero taxes paid. Painting is now worth $10 million--a $5 million increase having paid zero tax.
Then you die.
No federal tax, no estate tax on assets valued below $12.06 million.
--Severian the Lame
In other words, people are following the law in order to hold onto property that belongs to them. It certainly doesn't belong to the government. Not seeing the downside here.
edited to add... I guess I can see a downside if you happen to believe that the government is entitled to take whatever it wants, whenever it wants. Do you believe that?
If by "people" you mean individuals with wealth so vast you literally can't comprehend it, and if by "law" you mean a loophole they get to take advantage of, then we're on the same page.
The downside is that ordinary schlubs like you and me have to make up for the taxes they're avoiding. And I need my tax dollars much, much more than a guy with $100 million in assets. To say nothing of the guy with $500 million or $1 billion in assets, because that $100 million is just the poorest of the people who would have to pay this 20% tax.
Important also to remember that Biden mentioned being in favor of closing that loophole. But the executive does not create legislation. Until that legislation is written, let the unimaginably rich fight their own battles. Because this idea is just for the people worth $100 million or more (spoiler: that's not you).
--Severian the Lame
Open the door to the $100 million dollar club with the support of the minions. Then after that is established they open the next door that affects the minions.
Many retirees pay zero because there assets are sheltered.
If you think it is only about high net with individuals, you must be new here.
But it's not any of these things. It's literally not. But people with unimaginable wealth really, really want you to think that it is. Because then you'll fight their battles for them, while they go on being unimaginably rich in part by literally paying zero taxes on millions and millions of dollars of gain while you and I struggle to pay our taxes.
Let the unimaginably rich fight their own battles. The second legislation is written calling for taxation on an average guy's average coin collection, I'll pick up that picket sign and stand beside you demanding its downfall.
Because I guarantee you the unimaginably rich guy won't be there.
--Severian the Lame
No one who has money to waste on coins is struggling.
I would sooner support a 0% capital gains tax. I mean, I pay my income tax, and employment tax, and property tax and sales tax and then I save and invest the leftovers. Why should my leftovers be taxed at all? They've already been taxed.
Envy makes for a lousy tax policy. But, if we want to play that game, I know 50% of the population that would be happy to include old, well-heeled coin collectors in the policy.
No toll I just do not want to see the discussion closed because you need to be a less than thoughtful person.
And to everyone else I applaud the ability to stay on point and have a rational discussion about this subject. While it is true that legislation like this, if written like this, would have no effect on most if not everyone here, the possible longer range effects are where the issue might be for collectors.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
Perhaps the government should spend more time looking for ways to cut wasteful spending. Just a thought.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
The ability of the rich to reduce the taxes they owe by deducting the state and local taxes they pay was limited a while back. The people you are looking to to tax the rich even more are trying to figure a way to restore that tax deduction for the rich.
If they want to tax the rich more, why are they trying to restore tax deductions for the rich?
Hoarding gold and silver and distributing it to the markets when it gives you an advantage is something that makes people not want to invest. I feel like it would increase the supply of gold to everyday consumers which would lower the price. But increasing supply is a nice addition.
I feel like I would be for it if the government could spend the money wisely, but they are incapable of that, and saying "we need more taxes" never really leads to the social programs they promise, and if it did they wouldn't need the politicians promising them that anymore. I get the idea of taxing stagnant wealth so even if you don't technically have income you're paying your fair share, but still. I'm not going to support any of these programs until I see a decent chunk of the 20k spend per person per year actually going to the people they promise it's going to.
How can you have a discussion about potential taxes without it getting political?
'tis not possible, says I.
If you are required to pay taxes, you should be informed and concerned about any attempts to modify, redirect, increase, or otherwise monkey with tax law.
Then we're on the same page 100%. Neither of us thinks average guy's average coin collection should be taxed.
And it's really important to remember that not a soul is calling for that.
But boy howdy, people with unimaginable wealth sure hope you think they are because then you'll fight their battles for them.
Imagine if you have a business that creates a million dollars in profit every year for a decade or two, and you never have to pay a cent in taxes on that profit. That's what these assets are. They're not "art". They're not a "collection". They're a simple machine selected and acquired solely to generate wealth 24 hours a day, 7 days a week, for decades on end, without paying a cent in taxes.
Envy does make for lousy tax policy. But so does avarice.
--Severian the Lame
I don’t have a 401k. My income is from retiring from the USAF and it is taxed.
You could ask those politicians you're looking to for this legislation about avarice. You know, the ones who've been in government their whole lives and have somehow become millionaires.
?
$100 million dollar household with less than $12 million in assets? Seems unlikely.
In any case, taxing unrealized gain forces people to sell their assets to pay the taxes. That's beyond unreasonable.
Personally, I don't care how much money someone else has. They have more than me, but I have more than some others. If I promote punitive taxation on someone else I am only inviting it to be applied to me someday.